Correlation Between BE Semiconductor and Pebblebrook Hotel
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Pebblebrook Hotel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BE Semiconductor and Pebblebrook Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Semiconductor Industries and Pebblebrook Hotel Trust, you can compare the effects of market volatilities on BE Semiconductor and Pebblebrook Hotel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BE Semiconductor with a short position of Pebblebrook Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Pebblebrook Hotel.
Diversification Opportunities for BE Semiconductor and Pebblebrook Hotel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and Pebblebrook is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Pebblebrook Hotel Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pebblebrook Hotel Trust and BE Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BE Semiconductor Industries are associated (or correlated) with Pebblebrook Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pebblebrook Hotel Trust has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Pebblebrook Hotel go up and down completely randomly.
Pair Corralation between BE Semiconductor and Pebblebrook Hotel
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.36 times more return on investment than Pebblebrook Hotel. However, BE Semiconductor is 1.36 times more volatile than Pebblebrook Hotel Trust. It trades about 0.07 of its potential returns per unit of risk. Pebblebrook Hotel Trust is currently generating about 0.0 per unit of risk. If you would invest 6,138 in BE Semiconductor Industries on October 16, 2024 and sell it today you would earn a total of 7,752 from holding BE Semiconductor Industries or generate 126.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Pebblebrook Hotel Trust
Performance |
| Timeline |
| BE Semiconductor Ind |
| Pebblebrook Hotel Trust |
BE Semiconductor and Pebblebrook Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Pebblebrook Hotel
The main advantage of trading using opposite BE Semiconductor and Pebblebrook Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Pebblebrook Hotel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pebblebrook Hotel will offset losses from the drop in Pebblebrook Hotel's long position.| BE Semiconductor vs. Penta Ocean Construction Co | BE Semiconductor vs. WT OFFSHORE | BE Semiconductor vs. Hanison Construction Holdings | BE Semiconductor vs. TITAN MACHINERY |
| Pebblebrook Hotel vs. Elmos Semiconductor SE | Pebblebrook Hotel vs. BE Semiconductor Industries | Pebblebrook Hotel vs. KINGBOARD CHEMICAL | Pebblebrook Hotel vs. Siamgas And Petrochemicals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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